Why is a gray circle around some songs I just added to my library?

iTunes 12.1 (worst version ever)

I have been adding music to my Library for a long time even in 12.1. I've searched the forums on here and no one else seems to have a problem quite like mine. So here goes:

I have a .mp3 in a folder. I go to iTunes -> Add to Library -> Select song -> Open

Then the song disappears out of the folder it was in. It will play in my big library but when I add it to my iPhone, the song is grayed out with a circle.

This is so irritating.

I've tried dragging the song directly into my library. I randomly encounter this issue every few months and it always requires a new solution to fix it I have no idea why this version does this.

My theory is that iTunes grayed it out because the song disappears from the folder and the root cannot be found. When I added songs to the Library before this, it never erased the song out of the folder it was in... and I never had this problem.

Any ideas?